The Cabinet has approved the establishment of the National Infrastructure Fund & the Sovereign Wealth Fund, the twin engines designed to underpin President Ruto’s bold and ambitious KSh 5 trillion roadmap to transform Kenya into a first-world economy.

The approved funds are aimed at pivoting Kenya’s national development financing away from external debt and increased taxation.

The National Infrastructure Fund has been approved as a limited liability company (LLC), a legal structure intended to attract private investors by limiting their liability to their share capital.

National Infrastructure Fund to Spur Private Investment

The primary objective of the NIF is to serve as the “central engine” for aligning the country’s financial resources with its national development goals.

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Key to its capitalization is a policy shift: all proceeds from the privatization of State-Owned Enterprises (SOEs) will be ring-fenced and channeled directly into the NIF for reinvestment into public infrastructure.

“Through innovative mobilization of domestic resources, strategic monetization of mature public assets, democratization of ownership through capital markets and the deployment of national savings, the Government will unlock large-scale private sector capital to finance priority investments while reducing reliance on borrowing and taxation,” the Cabinet report outlined.

The report further indicates that the fund will focus on scaling up existing and new projects in key priority areas, which include upgrading infrastructure, boosting food security through irrigation, and expanding energy generation to power industrialization.

It added that every shilling invested through the said fund is expected to crowd in up to ksh10 additional from long-term investors.

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“Under the new framework, all privatisation proceeds will be ring-fenced and invested strictly in public infrastructure projects that generate and preserve long-term value. Every shilling invested through the Fund is expected to crowd in up to KSh10 additional shillings from long-term investors, including pension funds, sovereign partners, and private equity funds and development finance institutions,” the Cabinet report read.

Sovereign Wealth Fund Policy Approved for Future Generations

The SWF will be capitalized with revenues from mineral and petroleum resources, dividends from public investments, and a portion of the privatization proceeds. This structure is meant to safeguard future generations from depleting non-renewable resources without deriving lasting benefit, fulfilling the constitutional demand for inter-generational equity in resource use.

It also operationalizes Article 201 of the Constitution on inter-generational equity and advances the Kenya Kwanza Manifesto’s investment-led growth agenda.

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The Ksh 5 Trillion Roadmap

The establishment of these funds is integral to the President’s Ksh 5 trillion blueprint, which targets four core pillars of economic transformation

Transport and logistics infrastructure will be expanded through the dualization of 2,500km of highways and the tarmacking of 28,000km of roads, extension of the Standard Gauge Railway to Malaba, expansion of regional oil pipelines, and modernization of airports and the ports of Mombasa and Lamu, strengthening connectivity across farms, industries, cities, and regional markets.

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Both funds will be professionally and independently managed under clear governance, transparency and accountability frameworks.

The National Infrastructure Fund will be overseen by a competitively appointed Board and CEO, while the Sovereign Wealth Fund will operate under a robust policy framework to ensure prudent investment, fiscal discipline and inter-generational equity.

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President William Ruto at past event. PHOTO/pixels